S&P rates Coinstar loan BB-

Standard & Poor's said it assigned its BB- corporate credit rating to Coinstar Inc. At the same time, S&P assigned its BB- bank loan rating as well as a recovery rating of 4 to Coinstar's proposed $300 million senior secured credit facilities, comprising a $250 million seven-year term loan due 2011 and a $50 million five-year revolver due 2009.

The outlook is stable

Proceeds of the $250 million term loan will be largely used to fund the acquisition of American Coin Merchandise Inc. Coinstar has agreed to acquire American Coin for $235 million.

S&P said the ratings on Coinstar reflect significant customer concentration, the relatively short-term nature of its contracts with retail partners, higher operating risks at American Coin, and potential risks integrating this operation. These risks are partly mitigated by the company's relatively efficient proprietary coin processing technology, positive operating performance, and adequate credit protection measures.

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